Kenya secures Sh77b syndicated loan - Business Today News
Connect with us

Banking

Kenya secures Sh77b syndicated loan

The money obtained from the Trade Development Bank (TDB) will be used to pay off creditors in another two-year syndicated loan that was extended last year

Published

on


Kenya has secured a Ksh 77.3 billion (US$750 million) syndicated loan for seven years from the Trade Development Bank (TDB) to pay off creditors in another two-year syndicated loan that was extended last year, Reuters reports Tuesday quoting two banking sources.

The government was also set to issue a Ksh 154.6 billion (US$1.5 billion) Eurobond for 10 years by the first week of March, to take advantage of high demand for new issues, one of the sources told the news agency.

According to Reuters, both Kenya’s 2019 issue and the 2024 bond have seen their yields fall by about 100 basis points since November last year.

Officials at the National Treasury did not respond to a request for confirmation of the information from Reuters.

TDB, a regional bank formerly known as PTA, was also not immediately available for a comment. The terms of the new syndicated loan were also not immediately available.

National Treasury Cabinet Secretary Henry Rotich had last November said a six-month extension of the syndicated facility had been agreed with 90% of investors. Funds raised from a new Eurobond issue could be used to pay off the outstanding amount, he said.

The extension was partly caused by a prolonged presidential election, after the Supreme Court nullified the first vote and ordered a re-run. That disrupted government programmes and raised the political risks associated with investing in Kenya.

READ: Former Nakumatt employees partner to open store

Stability has since returned after President Uhuru Kenyatta was sworn in for a second term on November 28, but investors could demand a small premium on the upcoming dollar bond because of the country’s fiscal deficit, which climbed to 9% in the year to last June, said the source.

“It is very likely that they will be punished for that,” the source told Reuters.

According to Bloomberg sources, the government plans to re-enter the Eurobond market before the end of the current budget year, though a placement is likely from February onward as funds are required for spending purposes. The  National Treasury is seeking to plug a budget deficit that’s forecast to narrow to 6.4% of gross domestic product in the fiscal year through June from 8.5% last year.

In November last year, it emerged the government had asked banks to make proposals that were required outline the costs of either a five- to 10-year issue to be repaid in bullet form, or 12- to 15-year securities amortizing in the final three years. A road show is expected any time soon.

The last Eurobond issue was marred by controversy after Opposition leader Raila Odinga claimed a huge chunk of the money was diverted and swindled by individuals even before being disbursed to Kenya as the government struggled to identify projects in which the funds were utilised.

Auditor General Edward Ouko, in his September 2016 report, also declared that Sh215 billion could not not been accounted for even after the Government claimed the cash was allocated to ministries two years earlier. The National Treasury dismissed the findings.


Business Today is the leading independent online business website in Kenya. Started in 2012 by a veteran business journalist, it has a huge following both in Kenya and abroad. It covers various business and related issues. Email editor at: [email protected]

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News Updates

NEWS8 hours ago

British pensioner guilty of Kenya ‘holiday ‘ rape charges

The Crown Prosecution Service (CPS) said Keith Morris, 72, befriended the young victims' families over the past 20 years, giving...

Health1 day ago

US surrogacy agency withdraws from ‘perilous’ Kenya

Sensible Surrogacy now recommends new lower-cost programmes in the United States, which it says are completely safe and have the...

NEWS1 day ago

Kenya to reform laws to enhance biodiversity conservation

Tobiko says the ministry of Environment has formulated and reviewed laws and regulations to implement the provisions of the constitution...

Education2 days ago

Endowment Fund for Alliance High School launched

Fund targets to raise at least KSh 5 billion under the endowment funds, between now and 2026, the year the...

NEWS2 days ago

Uganda PM, Wangamati forge closer ties

Drawing from their proximity and shared culture including common language, Governor Wycliffe Wangamati said the two regions are in fact...

NEWS5 days ago

Youth PS Lillian Omollo, NYS chief Ndubai quit

State House Spokesman Manoah Esipisu says President Uhuru Kenyatta accepted the offer by the two officers to step aside for...

NEWS5 days ago

Police issue alert over emerging cult

Directorate of Criminal Investigations says the cult, known as Young Blud Saints, believes that there are three gods namely: true...

NEWS6 days ago

Cyprian Nyakundi released on DPP’s orders

Noordin Haji had also directed that no further criminal charges relating to the application should be registered against the blogger...

Politics6 days ago

I’m not boarding, Miguna tells Sonko

Nairobi County Assembly Speaker Beatrice Elachi had confirmed receiving Sonko's letter but asked him to regularise his Kenyan citizenship, a...

NEWS6 days ago

Patel finally speaks, pledges support for victims

Family says it continues to address immediate humanitarian concerns, providing food and nutrition, clean drinking water, healthcare and basic household...

Advertisement

Trending